Flipkart valuation marked up 10% by investor Valic

Prior to this, Valic had marked down the value of their holdings in the Bengaluru-based e-tailer for two consecutive quarters by 20.2% and 12% respectively.Vikas SN | ETtech | August 10, 2016, 18:27 IST

Bengaluru: After facing a series of markdowns by its investors, India's most valuable startup Flipkart seems to be finally seeing some respite.

Mutual fund investor Valic has marked up the valuation of its Flipkart shares by 10% to $108.04 per share for the May ended quarter, compared to $98.19 per share for the February ended quarter.

Prior to this, Valic had marked down the value of their holdings in the Bengaluru-based e-tailer for two consecutive quarters by 20.2% and 12% respectively.

This markup by Valic values Flipkart at around $11.55 billion, as compared to $10.5 billion earlier. This is however still down from Flipkart's peak valuation of $15.2 billion when it last raised capital in July 2015.

Valic had picked up shares in Flipkart as a part of its series D round of funding in 2013, when the India's largest e-commerce player had raised $360 million in two tranches.

Last month, another mutual fund investor Fidelity had disclosed a marginal 3% markup in the valuation of its Flipkart shares, after two consecutive markdowns earlier this year.

India's largest online retailer had also faced consecutive markdowns from other mutual fund investors like Morgan Stanley which had reduced the value of its holdings by 38% from last year, T Rowe Price which has slashed its value by 32% from last year and Vanguard which has marked down its value by 28% from last year.

That being said, markdowns are part of a now controversial global trend, wherein mutual funds have not spared even leading startups like ride hailing app Uber and house rental startup Airbnb.

"(Markdowns are) a theoretical exercise by small investors. From our perspective, valuation is when we raise money," Flipkart CEO Binny Bansal told ET in an earlier interview.

Flipkart is currently battling out to maintain its leadership position in India against rival Amazon which is ramping up its Indian operations, with founder Jeff Bezos committing an additional $3 billion investment to its India unit in June this year, taking the total commitment to $5 billion.

A fortnight back, Flipkart also tightened its hold over the fashion category, which is the second largest segment for online retailers after smartphone and electronics, after its fashion unit Myntra acquired main rival Jabong for $70 million.